Commissioner Jones Announces Arrest Of Business Owners For Insurance Fraud
News: 2011 Press Release
Insurance Commissioner Dave Jones today announced the arrests of Stockton residents Sonia and Alfredo Casas, 48 and 51, on warrants for 13 Felony counts including insurance premium fraud, filing false reports with the Employment Development Department (EDD) and failure to withhold or remit unemployment taxes. If convicted on all charges, each faces a maximum of 22 years in state prison, $910,000 in fines, and restitution. Their bail is set at $1,000,000.00. The case is being prosecuted by the San Joaquin County District Attorney's Office.
"Business owners who seek to defraud and dodge their legal responsibility put their employees at severe risk," said Commissioner Dave Jones. "Individuals who perpetrate such acts will be prosecuted to the fullest extent of the law."
In February 2010, the Department of Insurance, Fraud Division, the Employment Development Department (EDD), and the San Joaquin County District Attorney's Office began a joint investigation into Cal Poultry Labor, Inc. and California Farm Services, Inc., both owned by the Casas', regarding allegations of underreported payroll to both their workers' compensation insurance company and EDD. Cal Poultry Labor, Inc. and California Farm Services, Inc. were insured with Redwood Insurance Company and State Compensation Insurance Fund during the years in question. The case stemmed from a complaint received by EDD. Cal Poultry Labor, Inc. supplies labor to turkey farms and Cal Farm was involved in harvesting and trucking. The Casas' also own two other businesses, Bella's Bridal and The Shadow Oaks Steakhouse.
In June and August, 2010, search warrants for bank records were served at several banks related to accounts for the Casas', Cal Poultry Labor, Inc., California Farm Services, Inc., and other related business accounts. These records revealed a significant amount of underreported payroll to the insurance companies and EDD.
Yesterday, search warrants were served at five locations: the Casas' residence in Stockton, CA; their accountant's office; Bella's Bridal; Shadow Oaks Steakhouse; and the main facility where Cal Poultry contracts to provide labor (this facility is not considered a suspect in this investigation). The Casas' were also arrested at the time of the search warrants. Based on the initial evidence gathered, it is estimated that the Casas' have underreported approximately $5.8 million in payroll to the insurance companies. EDD, State Compensation Insurance Fund, and Redwood Insurance Company will conduct full audits for Cal Poultry Labor, Inc., California Farm Services, Inc., and other related businesses based on all of the evidence seized. It is estimated that the total amount of underreported payroll to the insurance companies could exceed $15 million.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.